Preview

There is a consensus in the community of researchers that ability explains a substantial part of the differences across people of success in socioeconomic life, and that ability gaps across people emerge at childhood before they start school. Building on recent advances in the child development literature in Economics pioneered by James J. Heckman, we estimate two transitions technology of skill formation using four waves of survey data in Ethiopia which are part of the longitudinal project "Young Lives" funded by the UK aid department. We found evidence that early life conditions, including antenatal care have significant effects on child’ health, and that child health is positively related to a higherlevel of ability in the four rounds, except in the last round where we observed a negative effect of child health on noncognitive skills only. We also found evidence of self-productivity for cognitive skills and noncognitive skills and cross productivity from cognitive to noncognitive skills. We don’t find any effect of parental investment on child’s cognitive/noncognitive skills and even a negative effect at age 5. This is partly due to a huge missing data which leads us to exclude some important variables from the analysis.